President Trump and North Korea’s leader Kim Jong-Un recently held a historic summit that captured the American public’s attention.
Some commentators have argued that establishing a dialogue between the two countries is a meaningful step, but others criticize President Trump for not proposing that the dictator reform his oppressive regime, which is notorious for brutally executing political dissenters.
Perhaps the fragility of nuclear disarmament talks precludes pushing for direct political reform, but could there be an indirect method to such reform that is more easily negotiable?
According to Nobel Prize laureate F.A. Hayek, easing restrictions on economic freedom may be exactly what is needed to encourage political freedom in a totalitarian state.
Hayek famously stated in a 1979 New York Times interview: “You can have economic freedom without political freedom, but you cannot have political freedom without economic freedom.”
That begs the question: what conditions constitute economic freedom?
The Fraser Institute, which publishes a widely used index of economic freedom, writes that: “The cornerstones of economic freedom are (1) personal choice, (2) voluntary exchange coordinated by markets, (3) freedom to enter and compete in markets, and (4) protection of persons and their property from aggression by others. Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.”
There are many historical examples where such freedom altered the political climate, one of which is Chile.
When General Augusto Pinochet seized power in a 1973 military coup, he instigated a ruthless attack on freedom of speech and political opponents in Chile. However, to turnaround the failing Chilean economy, he reduced government spending, privatized state-operated industries, and eliminated many tariffs. Eventually, a 1988 referendum denied Pinochet further terms of office and he peacefully stepped down in 1989, representing a drastic increase in political freedom.
How does economic freedom help lead to such a change?
In his book, Free to Choose, Milton Friedman explains: “By enabling people to cooperate with one another without coercion or central direction, [economic freedom] reduces the area over which political power is exercised.” Trading freely instills a spirit of individuality that shifts the perception of the government and makes citizens less likely to support central planning and control.
While economic freedom is necessary but not sufficient for political freedom, it represents an important step towards meaningful political change. That step is needed in North Korea more than ever, especially considering that the Heritage Foundation’s Index of Economic Freedom ranks the communist country dead last in the world for economic freedom. Even Venezuela, where leaders have resorted to deleting zeroes from the country’s currency, has more economic freedom.
Considering Hayek’s statement, should America be trying harder to push North Korea to open its economy? Could that be a more attainable path to political freedom?
[Image Credit: Center for Individualism]
Andrew Berryhill was a 2018 Alcuin Intern at Intellectual Takeout and a rising senior at Hillsdale College majoring in economics. Andrew has interned on Capitol Hill and was a research fellow for Hillsdale's economics department. In his spare time, he enjoys practicing the violin and playing golf.